Based on Supreme Court ruling, any repayment schedule is expected to be agreed upon with the state government of Gujarat and/or court

Essar Oil examining all legal options, expects to file a review petition in the Supreme Court

Mumbai: The Supreme Court on the 17th of January, 2012 ruled in the matter regarding the applicability of a sales tax deferment scheme offered by the state of Gujarat where in they have set aside the judgement of the High Court which ruled in favour of Essar Oil to avail benefits under the sales tax deferment scheme.

However, it needs to be clarified that the scheme was not for sales tax exemption but was only for a deferment of payment of Sales tax.

Essar Oil would like to further clarify the following:

The sales tax deferment benefit to Essar Oil was a loan repayable on the earlier of 2021/22 or on exhaustion of the full eligible amount (which the company expects to be FY 2013-14) in six equal annual installments

The quantum of the sales tax deferment benefit as per the Company’s estimate is Rs 9,100 crore.

Against this Essar Oil has utilised approximately Rs 6,300 croreas benefit under the sales tax deferment scheme.

Following the Supreme Court order, any repayment schedule is expected to be discussed and finalisedwith the State Government of Gujarat and /or Court.

The sales tax deferment liability has been assigned. As of 31st December 2011, the amount assigned is Rs 1,800 crore. This amount is repayable in accordance with the terms of the agreement.

Exiting the Corporate Debt Restructuring (CDR) scheme

Essar Oil is already in discussion with CDR lenders for exiting the CDR. This process of exiting CDR is expected to be completed shortly.

As regards the Master Restructuring Agreement (MRA), Essar Oil is required to obtain approval of the deferment of the sales tax by March 31st, 2012 and repay the same as per the incentive scheme.

Essar Oil is examining all legal options and it expects to file a review petition in the Supreme Court.

We are discussing the developments with the lenders to the company and there is no Event of Default (EOD) under the financing agreements.

About Essar OilEssar Oil is a fully integrated oil & gas company of international scale with strong presence across the hydrocarbon value chain from exploration & production to refining and oil retail. It has a global portfolio of onshore and offshore oil & gas blocks, with about 2.1 billion barrels of oil equivalent in reserves & resources. Essar Oil has over 300,000 bpsd (barrels per stream-day) of crude refining capacity that is being expanded to 405,000 bpsd. There are more than 1,600 Essar-branded oil retail outlets in various parts of India.

About Essar GroupThe Essar Group is a multinational conglomerate and a leading player in the sectors of Steel, Energy, Infrastructure and Services. With operations in more than 25 countries across five continents, the Group employs 75,000 people, and has revenues of USD 17 billion.